In 1910, Englishman Norman Angell wrote the bookThe Great Illusion to address the myth that nations could economically benefit from war. At the time that Angell was writing, popular and elite opinion assumed that a nation’s political power determined its prosperity, and that countries with preponderate military strength would have the greatest advantage. Angell acknowledges that this belief had validity in the past, however by the 1900s a country’s wealth became dependent on credit and commercial contract provided by the international financial system. Because of the delicate working of this system, if country A invades country B, than the chaos caused by the invasion would damage A’s access to credit. Moreover, country A would be unable to confiscate country B’s wealth without damaging its own economic well-being, and would destroy country B’s citizen’s will to do the work that is responsible for wealth creation. Through this reasoning, Angell argues that conquest and military power have become economically futile.

Angell’s work can provide insight into the possibility of conflict between the United States and China. According to a 2011 RAND study, conflict between the United States and China would likely lead to a global contraction greater than the one that occurred in 2008. For the United States, the economic losses would likely be even higher given the interdependent nature of the U.S.-Chinese economies. In 2014, total U.S.-China trade was worth $592 billion, China was the United State’s second largest trading partner, third largest export market, biggest source of imports, and the largest foreign holder of American debt, with $1.24 trillion worth of U.S. Treasury bonds in December 2014.